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Lucara’s Sales Lifted by Record 813ct. Diamond

Aug 7, 2016 10:10 AM   By Rapaport News
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Lucara Diamond Corp.’s revenue and profit soared in the first half of the year due to a record sale of a rough diamond for $63.1 million.

Revenue jumped to $191.4 million in the six months that ended June 30 versus $67.8 million a year earlier, the miner reported. The average selling price surged to $1,233 per carat from $340 per carat, while net income more than quadrupled to $63.3 million. The board declared a special cash dividend of $0.353 (CAD 0.465) per share payable September 15 in addition to the regular payout to investors.

The sales boost came as an 813-carat rough stone, ‘The Constellation,’ fetched $63.1 million, or $77,649 per carat, in May, marking the highest price ever achieved for a rough diamond. Lucara’s 1,109-carat ‘Lesedi La Rona’ diamond was expected to sell for an even larger amount at a Sotheby’s auction in London in June but all bids fell short of the reserve price.

Revenue was also lifted by an exceptional stone tender in April where it sold 10 rough diamonds for $51.3 million or $33,632 per carat.

All revenues were from diamonds mined at the company’s Karowe mine in Botswana, which is known for producing large and high-value rough. Operational performance at the mine in the first half was better than forecast, with the deposit yielding 340 “special” stones weighing more than 10.8 carats, including 12 diamonds that were larger than 100 carats each. A project to discover even bigger diamonds is “well advanced” and specialized equipment is currently being made, with commissioning on track for the end of the third quarter. Separately, a “Mega Diamond Recovery” project is on schedule and currently in design stage.

Second-quarter revenue, which included the sale of the Constellation diamond, catapulted to $140.8 million from $38.1 million a year ago and net income increased more than fivefold to $46.1 million. The average selling price surged to $1,824 per carat versus $412 per carat a year before.

Full-year revenue is expected to be $200 million to $220 million excluding the sale of the Constellation. The miner is holding the ‘Lesedi La Rona’ in inventory and considering options for its sale. Production guidance for 2016 is also unchanged at more than 350,000 carats.
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Tags: Botswana, Constellation, Exceptional Stones, Karowe mine, large diamonds, Lesedi La Rona, lucara, Lucara Diamond Corp., Rapaport News, Sotheby’s, The Constellation
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